There is a huge supply of corruption because there is an even larger demand for it

 

Manu Joseph:

Like the mamas of some businessmen, research is a tax-saving device in India; and social work a way of keeping wife and daughter-in-law employed. Corporate India invests very little in science or strategic philanthropy—the visionary pursuits that materially and culturally enriched Western society, especially the United States. Instead, big Indian business spends far more money on persuading politicians. Indian corporations are not only complicit in the state of the nation, but also, as the chief sponsors and beneficiaries of political corruption, largely responsible for it. That is why, in this season of bleak economic projections and Manmohan Singh bashing, it is a bit  comical to see the serious men of corporate India, one after the other, appearing on a pedestal and condemning the Government for all that is wrong with the nation today.

They talk of the ‘lack of political leadership’ and ‘policy paralysis’ (which, anyway, began as a response to one of the biggest corporate scandals in modern India). NR Narayana Murthy even said, “I feel sad about [the] Indian economy.” He clearly does not believe he is part of the problem, which is odd.

A few months ago, after the Chief Economic Advisor to the Government, Kaushik Basu, suggested that bribe-giving be made legal, Murthy said, “It is a great idea.” Basu’s logic, which was correctly understood by Murthy, was that if bribe-giving were legalised, it would empower the giver to later rat on the taker. This reasoning tries to convey that luring a person for commercial gain or providing an incentive to a government official to break the law is morally, and so legally, excusable. It also tries to convey that the business community is a helpless victim of a corrupt system. It is a laughable claim.

There is a huge supply of corruption because there is an even larger demand for it. Indian companies have traditionally leaned more on purchasing policy or turf than on competitive innovation. In fact, if there is  ‘policy paralysis’ in the Government today, corporate India has for long had ‘innovation paralysis’ (apologies for not providing a sweet alliteration). When the going was good for large corporates in the boom years after the economic reforms that began in 1991, when they were vastly enriched as the new owners of national resources and businesses previously owned by the Government, what exactly did they do? Nothing much.

There was outsourcing, of course. And copies of patented drugs, and one overrated cheap car that has largely failed. There was much chest-thumping in the media over Indian companies buying overpriced foreign brands. Also, a phoney celebration of the Indian entrepreneur’s alleged ability to improvise in the face of odds—the bullshit of ‘jugaad’. Isn’t it true that anyone anywhere in the world will know how to break the rules to survive? Is this the greatest virtue Indian enterprise can find in itself? An underworld system of foreign exchange or a tractor assembled from other automobile parts are not things to be proud of. The fact is that a Jaguar is the real jugaad.

British and American companies, in their formative boom years, invested heavily in universities and research, and even in culture. They consistently showed that they had a stake in the progress of man and well-being of society. Later,  Japanese companies graduated from being manufacturers of cheap low-brow goods to become technological leaders until they were beaten again by American and European companies. The battle is far from over. Chinese firms, though with the support of a government that has the luxury of knowing what it is doing, are slowly making that shift today.

Indian software companies were great beneficiaries of progressive government policies and were even protected from political corruption, at least when compared to other industries. In the years when they made their billions, they kept saying, “India will soon move up the value chain.” Any reporter who was covering the software industry would have heard this thousands of times. Yet, India has not moved up the chain. In fact, Indian outsourcing itself is beginning to lose some ground to other Asian nations. It has no ideas to elevate itself.  And it has not invested enough in improving the educational and intellectual standards of the average Indian. As a consequence, it appears to have lost its way.

It is true that India is just emerging from being one of the poorest regions in the world, prosperity is among its newest experiences, and Indian companies will need more than just two decades of freedom from socialist central planning, to make their giant leaps. But there is no evidence today that they are planning their future on the strength of ideas or crucial investments in society. (It is important to note though that Ratan Tata is one of the major funders of the American scientist Daniel Nocera's project 'The Artificial Leaf', which is a device that mimics the science of photosynthesis that plants use to extract energy from sunlight and water. If the Leaf works as Nocera hopes it would, it will fundamentally alter the way the world looks at energy sources.)

The Government has good reasons to be myopic. It has to sell itself to its customers every five years. It will sacrifice prudent long-term goals for expensive and immediate social security. Indian business, too, is as myopic, though it does not have good reasons to be so. A more innovative, feisty and philanthropic corporate India will not only enrich the nation but also steal away  the Government’s core customers as it did with the middle-class. And Narayana Murthy will have no reason ever to be sad again.